OceanaGold increases Martha resources to 1 million ounces

Using a cut-off grade of 2.15 g/t gold, OceanaGold (OGC.TO, OGC.AX) has now more than doubled the resources at its Martha underground project, part of its Waihi gold complex in New Zealand. The inferred resource almost doubled to 667,000 ounces gold at an average grade of 4.59 g/t, while the indicated resource increased by 136% to 331,000 ounces at a slightly higher grade of 4.84 g/t.

This news comes right after completing the permitting process and this will allow the company to start its mine development at Martha which should help OceanaGold to further boost the gold production rate. Meanwhile, OceanaGold will continue to explore for more high-grade gold zones at the Waihi vein system, and we have the impression the company’s exploration program has been very efficient. OceanaGold completed 30,700 meters of drilling at the Martha (and nearby veins), and if the total resource increase of 519,000 ounces could be attributed to that drill program, Oceana has discovered almost 17 ounces of gold per meter of drilling for a discovery cost that’s likely just over US$10/ounce.

And that’s cheap, considering every additional ounce will have a positive impact on the economics of Waihi. The processing infrastructure is already in place so now it’s just a question of how much of the 1 million ounces will actually end up in the mine plan. OceanaGold has earmarked an additional C$11M for exploration around the Martha open pit.